In my experience with capitalization, you need to prove feasibility before you can begin to capitalize. We proved business feasibility by doing a high level business case. We proved technical feasibility by doing a high level design. The high level design was around 20 pages for a work product produced by a team of about 100 engineers. It laid out the high level architecture and went into just enough detail that showed we had thought through the issues that could make it infeasible. This approach satisfied our auditors and allowed us to capitalize the work done between the point that these two documents were approved and the point that we went GA.
So for capitalization, you don't need the level of detail that you mention. More likely it is that they want these things because they're used to having them and they feel that they are at risk without them. Assuming that's the case, you need them to understand that there are costs for this approach.
By designing up front, you're adding complexity for the things that you think will come to fruition. Much of what is designed will not be done though. Things change. Requirements. What you think you'll need. Designs become stale. Even if that work does get done in the future, it is likely that the design work will need to be redone. You can do a better design with less effort if you do just enough as you go. Just enough is a judgment call. You want to think ahead on issues that could put the project at risk. But just enough.
If you can convince them that the old way is not free and the new way has advantages, then maybe you can turn the conversation to do they really need it and if so, why do they really need it? And then try to come up with a different approach that is more in line with agile, but still accomplishes the same goals.
Hope this helps...
Walter
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http://www.walterbodwell.comhttp://www.planigle.com (Planigle, the way to Plan Agile)